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Shares Of The Company Stock Option Incentive Mechanism

Posted on:2002-04-26Degree:MasterType:Thesis
Country:ChinaCandidate:X L ZhouFull Text:PDF
GTID:2206360032955536Subject:Investment economics
Abstract/Summary:PDF Full Text Request
In recent years some companies in the developed countries such as the United States set up a long-term incentive system and increase managerial achievement by the Executive Stock Options (ESO), which leads to a good effect. In our country, along with the continuous development of economy marketability, the stock company which is the representative of the modern enterprise system is becoming an important part of the social economic life. Meanwhile, the executives of the stock companies are playing a greater and greater role in the development of the companies. However, the problem of principle-agent is more and more obvious as well. Executives actually control the company and they have the inside information which others haven't. In the case of unsymmetrical information, the separation of the ownership and the managing right of the company makes the objective benefit of the owner inconsistent with that of the executive. To solve the conflict, it is necessary to stimulate executives, especially by means of ESO. Thus, the conflict can be overcome and the objectives of the executives and owners can be really consistent so that executives can work hard for the long-term development of the company. Learning from the experiences of incentive system of the ESO in other countries, based on the practical application in some companies in our country, and guided by the Principle-Agent Theory, the Theory on Human Capital, and the Theory on Financial Option, this paper puts forward an argument that the ESO should be popularized in the stock companies in our country, and also finishes the following:1.It objectively and systematically comments on and analyses the theory basics, basic principle and general system design of the ESO.2.It studies and analyses the feasibility of the ESO in china. The key to whether the ESO is feasible or not in China lies in one factor which can make it effective-the validity of the securities market. We can prove that although the securities market in our country is reached to the weak efficiency only, it still supports the carrying out of the ESO.3.Based on the studies of existing cases in our country, it discusses the existing problems in practice and puts forward some suggestion on the policy.
Keywords/Search Tags:Stock company, Executive, Incentive system, Stock option, ESO, Market efficiency, Principle-Agent Theory
PDF Full Text Request
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